The master plan

The Master Plan

 

In a world of manipulated markets and out of control monetary policy, we have to get a little creative when it comes to protecting and building our wealth. This is a comprehensive explanation of my plan going into the end of the year and further on. I am not a trader, nor do I pretend to be. I have tried to invest this market using fair value and charting analytics, but all the financial principles of the past are nonexistent. We no longer have a free market. We are subjugated under a centrally controlled economy and financial system run by the US Federal Reserve. They determine whether the market will go up or down, and they have unlimited funds and monetary tools to rig markets in either direction. I have a decent understanding of options and futures trading to properly hedge a portfolio, but I have found it increasingly difficult to pinpoint movements in this market. The fact is true price discovery and traditional methods of valuation are now theoretical. There are far too many determinates that have variable effects on markets that completely go against conventional investing. For that reason, I have given up on short-term profits or swing trades and I have elected to take a more conservative approach to investing. That doesn’t particularly mean that I have lowered my risk tolerance, but I feel more comfortable sitting in a diversified position intended for a longer period of time. I have high conviction for these positions as I have put in hundreds of hours of research and taken the advice of more seasoned individuals to come up with a 5-to-10-year master plan. Enjoy.

First, we must recap on the current economic situation. Shit is fucked. Almost every economic indicator and financial forecast is pointing towards an era of pain and destruction. The fundamentals of investing have proven that a majority of markets, particularly stocks and real estate, are severely overvalued. This is mainly due to a drastic increase in the money supply by central banks around the world. This increase of currency in circulation, combined with historically low interest rates, has allowed entities and individuals to borrow cash and speculate in markets with little risk. Since 2008, stock and real estate have virtually gone straight up in price with very few if any substantial pullbacks. Of course, this favorable environment could very well continue unimpeded. However, the drivers of this decade long bull run have turned on their head. Recent policy decisions by the Federal Reserve and other central banks have violently switched their easy money mindset to economic constriction. This means that markets no longer have a monetary backstop. Whenever things started looking sketchy in the markets, the Fed was right there to stimulate and reverse them even higher. Without this mechanism investors are essentially on their own in an environment of overpriced assets. Historically, a tightening policy by central banks is never a good thing for the economy. Assets prices fall, unemployment rises, and everyone is fairly miserable for a while until they pivot. The conventional financial knowledge requires investors to seek other asset classes to protect their wealth. Remember, when markets fall money doesn’t just disappear, it rotates into other assets. Sometimes its bonds, sometimes its gold and commodities, and rarely it goes right back into cash. Smart investors and financial institutions chase ROI (return on investment). This percentage is constantly changing within assets and fluctuating between asset classes. Regardless, the money has to go somewhere. Because of the drastic increase in currency and over inflated assets, there is a freakish amount of money that will eventually rotate out of stocks and into other avenues. The trick is to be positioned in those assets before the rotation happens. It is impossible to time this transition but generally it is much better to be early than it is to be late.

The above paragraph outlines a decent strategy in a traditional economic downturn. Although, notable economists are predicting a crash of much more significant magnitude. 2008 will be a cakewalk compared to the recession that we are about to face. Think more in terms of a 1930’s Great Depression. If that is true, we need to be properly positioned in assets that thrive in these types of conditions. In addition, I speculate that we are at a major economic turning point, in which, the systems of money, finance and banking are about to change forever. The US dollar has had a good run considering that it’s been backed by nothing but Saudi oil and debt for about 50 years. But this dollar supremacy cannot last forever, especially since the rest of the world has suffered economically in the wake of American prosperity. Believe it or not, we are not everyone’s friend, even our geopolitical allies would rather see us fall if it meant stability for their own country. The faults of the US petrodollar system have become far too apparent to the rest of the world, especially for the elite globalists who have the means to replace it. Institutions such as the IMF (International Monetary Fund), WEF (World Economic Forum), and the United Nations/World Bank have concocted a delightful scheme to “modernize and standardize banking in the world economy under a single currency” their words, not mine. This new financial structure is a digital system backed by commodities and legered on the blockchain. I used to call this speculation, but now it appears to be already happening before our eyes with the full support of governments and central banks around the world. It’s coming whether we like it or not. The switch from the legacy system to the new system will likely be instantaneous and virtually unnoticeable for a variety of the worlds population. This plan has been thought out and conducted for over a decade. Your bank accounts and all of your assets will simply be tokenized and transferred over to a blockchain ledger and all you have to do is click “I agree to the terms and conditions”. I don’t know what happens if you don’t agree but I imagine it will be despicable and you basically won’t have choice. Most people won’t even notice or care. The biggest change will be seen in the accounting field as we move from a double-entry system of debits and credits to a triple-entry system which includes the blockchain ledger that reconciles all accounts. This is what we get look forward to, but it isn’t all bad. The new system will be faster, more scalable, more secure, and in every sense safer and better. Unfortunately, we will also lose a lot of control and privacy. Every transaction will be tracked, every account balance logged, and each individual will have their own ID showcasing all of their financial data. This will be like social security numbers on steroids. It will be much more difficult to hide illicit activity and all of our money will be under the absolute control of whatever custodian owns it (likely central banks). It will be lots of fun, I’m sure of it.

All that being said, this significantly changes how we interpret the current market downturn and how we prepare for this transition. We must realize that the switch from the legacy financial system to the new digital system will not be easy or painless. In fact, we are in that transition now. The central banks of the world are working collectively to bring the down the current system so that the conversion happens seamlessly. Endlessly inflating the currency has destroyed the middle class and created a severe wealth gap between the elite 1% and everyone else. This makes unfettered control far easier to implement. Regardless of what they say, the one true goal of central banks is to inflate. The more they inflate the more powerful they become and the bigger the wealth gap becomes. The current system is backed by debt, the entities with the most debt are central banks who wish to become the buyers and lenders of last resort. Meaning that they are the ultimate creditor of governments and also the biggest buyer of treasuries (government debt/bonds). This has created a system where every government on earth is financed by and indebted to the central banks. They have all the power and can send the world economy into depression at their own volition. When the big depression comes, citizen populations will become increasingly poor compared to the banks who own all the debt and assets. The people of the world will beg for the new system, and they will feel gratitude for the bankers for implementing the new one. What they won’t realize is that they will be incrementally poorer even though the balance in their account stays the same.

“Alright dude I get it, we’re all screwed and there is nothing we can do about it. What now?” It is impossible to know the strict timelines of the impending depression and digital transition without insider knowledge. Although, if we understand the endgame we can be positioned ahead of time and be on the right side of this wealth transfer. Based on my understanding of the central bankers and puppet politicians’ historical actions, I can make an educated guess as to what comes next. The powers that be will attempt to distract the masses with a variety of crisis’s which will require more funding by governments and more printing by central banks. This crisis-to-crisis method of diversion has worked flawlessly in the past and I’m sure the zombie consumers of today will fall for it again. You will start to notice an increase in intensity regarding media narratives of nuclear war, cyber-attacks, climate change, pandemics or any other world ending catastrophes. The validity of theses narratives does not matter, because they are designed to distract while the bankers conspire in the background. Economic problems and geopolitical strife will continue to get worse; the central banks will back up the markets with more stimulus to buy themselves more time. This will all lead up to a significant black swan event, I don’t what it will be, but it will be something like a Pearl Harbor, 9/11, Covid-19 style event to strike fear in the world population. This is when things get really shitty. Markets will crash, people will stock up on guns and ammo and governments will reenact or escalate levels of control. This is when the transition happens. While everyone’s attention is drawn to the big event, they will flip the switch and no one will be the wiser. Everything will change and nothing will change simultaneously. It has to be harmonious and it has to fix the problem at hand. The media will revel at the “quick thinking” of central banks and their historic world saving plan to digitize the financial system. After the switch, things will appear to go back to normal but in reality, your ability to build wealth will be far more difficult and your basic human right to privacy will disappear. To be on the right side of this, we have to play their own game. You must become your own central bank by owning the assets that they own.

The Plan:

In the short-term, I predict that markets will rebound, nothing goes down forever and this will give institutions the opportunity to sell-off risk assets (stocks) before the big crash comes. Right now, too many people are shorting this market for obvious reasons. Investors are scared of the bad economic data and escalation of war in Europe. During this time, I will add to my positions in energy, commodities and crypto at cheap prices until all the bears are gone. Soon there will be absolute relief in the markets, all asset classes will rise in tandem while the media cheers for new highs. Once sentiment reaches bullish euphoria and all the shorters have capitulated, I will initiate my evacuation plan. I will sell off a majority of risk assets and hold a large cash position. When tides change and market drivers begin their final push, I will take a large position in the Soros portfolio (short everything and sit in bond indices). The only thing you need to look at is the 10-year treasury yield and the DXY. These are the incremental market drivers; when dollar and 10Y begin to spike uncontrollably, you will know it’s time to get out.

Energy and commodity stocks are the place to be for the next 5-10 years. These are companies that produce assets with true value. If they continue to go down… Good! Buy more! If you are appropriately hedged in a short portfolio (Soros) you can adequately play both sides of the market. Physical assets, like gold and silver are also great hedges but the mining stocks will have far greater returns when true price discovery eventually comes. This may seem contradictory, but crypto is also a decent place to hedge against the market. Currently crypto has been moving congruently with other risk assets, when digital assets eventually get regulatory clarity, they will rise independently of other assets. Whether you understand the fundamentals of blockchain or not, this technology will be used in the new financial system. Not all cryptocurrencies will survive but the ones with real utility and institutional backing will be pivotal in the new economy. Learning about and investing in this industry will be just as important as the internet in the 90’s. The individuals who stay on top of new trends and technology will be much better off than the haters who shrug it off as inconsequential.  

Lastly, it is most important to get your own house in order. Prepare for the worst, stock up on cash, food and emergency supplies to be ready for any catastrophic events. Try to pay off any outstanding debt BEFORE you take positions in any markets. Have a plan and place to go if shit really hits the fan and work together with friends and family to better your chances. Arm yourself appropriately, the worse the economy gets the more desperate and dangerous people will become. I have no clue when this will actually happen, it could take 10 years to really play out or they could flip the switch tomorrow. All I know is that it will come. I would rather be 5 years too early than 5 minutes too late. These positions will not make you rich, but they will protect your wealth in the most coordinated and screwed-up times of our individual lives. Don’t let them distract you with trivial politics and societal woes while they steal everything from under your nose. Finally, please share this information and talk about it with people who are willing to listen. Not everyone is going to make it but you should take upon yourself to warn the people you care about so they don’t become a slave to the system. If we play this right, we’ll be alright.

Recap for the layman:

·       There are no longer free markets, we have a centrally controlled system susceptible to central banks.

·       A diversified and a conservative approach to investing is the correct move right now

·       Central banks are purposefully inflating the money supply and crashing the world economy.

·       We are at the precipice of a transition into a digital economy owned by central banks

·       You need to hold assets with intrinsic value to survive this transition (own what the banks own)

·       Stack gold and silver

·       Own stocks that have to do with energy and production of commodities (oil, uranium, food).

·       Hedge with cryptocurrencies (hard wallets are preferred instead of online exchanges)

·       Keep an eye on the 10Y Treasury yield and DXY. Spikes in these will crater the stock market.

·       Soros portfolio is there for anyone who wants to short this market on the way down.

·       Prepare your family for the worst and eliminate as much debt as possible.

·       Share this information and disregard the media distractions.

Thank you for your time.

-Crazy finance guy ;)

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